An agenda for change in U.S. climate policy? Presidential ambitions and Congressional powers Tora Skodvin and Steinar Andresen (co-author) (tora.skodvin@cicero.uio.no) LSE Workshop: Carbon Markets London, May 5 2009. Presidential ambitions: Key points in Obama’s climate policy program • Make the United States a leader on climate change by rejoining the UN-based negotiation process with an aim to develop an international climate treaty. • GHG emissions objectives: – Stabilise GHG emissions at their 1990-levels by 2020 – 80% reduction in GHG emissions from 1990-levels by 2050 – Economy-wide cap-and-trade, no free allocation of emission credits. 2 Congressional powers • The president can negotiate international treaties, but only ”with the Advice and Consent of the Senate” (U.S. Constitution, Article II, Section 2); • International treaties require ratification by a 2/3 qualified majority of the Senate (67 votes) (Article II, Section 2); • When ratified, international treaties acquire the same status as federal law and are subjected to the same implementation regime (Article VI). • Implications: – The United States rarely joins international treaties that are not founded on existing federal law. – Ability to take on international leadership role depends on the adoption of federal climate legislation. – Congress has a significant role to play in the realisation of Obama’s climate policy ambitions. 3 2008 Elections: Reinforced Democratic majority in both chambers of Congress House of Representatives: • 257 Democrats, 178 Republicans (218 required for majority) • Republicans lost 19 seats in the House Senate: • 56 Democrats, 2 independent (that normally vote with the Democrats), 1 undecided (Minnesota) • 1 switch from Republican to Democrat (Arlen Specter) • Democrats control a ”filibuster-proof” majority of 60 votes. 4 Ideological dimension important, but regional dimension also significant Coal-producing states Source: Energy Information Administration, http://www.eia.doe.gov/ States with GHG emissions targets Source: Pew Center on Global Climate Change, http://www.pewclimate.org/ 5 The regional conflict dimension in the Congressional climate policy debate • 110th Congress: Group of 10+ Democratic senators signaled their opposition to the Warner-Lieberman proposal; – Coal-producing states strongly represented; – Support, in principle, mandatory GHG emissions regulations; – But do not support ambitious and costly measures (particularly short term). • 111th Congress: Observers have identified 43 undecided senators; – 12: ”Probably yes”, 10: ”Probably no”, 21: ”Fence sitters” – 56% of the ”Fence sitters” are Democrats, 71% represent coal-producing states. (Source: Environment & Energy Publishing, www.eenews.net) • These senators will not vote for climate policy legislation that conflicts with the interests of their constituencies. 6 What could U.S. climate legislation look like? • Level of ambition: – Most proposals less ambitious than, for instance, EU position – Short-term targets (2020) likely to be more controversial than long-term targets • Policy instruments: – All proposals include cap-and-trade provisions, but acceptability linked to system design. – Notably, cost containment mechanism is likely: ”Safety valve” or ”Carbon market Efficiency Board”. A ”hybrid” system (trade → tax) would imply incompatibility with the EU ETS. • Concern about risk of ”carbon leakage”: – All proposals include ”border tax adjustment” or similar measure to protect competitiveness of U.S. industry. 7 New opportunities offered by the financial crisis: A ”Green New Deal”? • Economic stimulus package of USD 700+ billion adopted in February • Key feature: linkage of economic, energy security and climate change issues. • Energy-related provisions will have low impact on GHG emissions unless they are combined with comprehensive climate legislation that puts a price on carbon. • Educational effect: GHG measures can be economically profitable and serve other purposes linked to energy security. • But: Republicans sceptical of this argument. Congressional vote on stimulus reveals deep partisan (ideological) split. 8 Prospects for change in U.S. climate policy ”This was the moment when the rise of the oceans began to slow and our planet began to heal” • President Obama has embarked on a shift in U.S. climate policy both at the domestic and international levels. • Mobilising sufficient Congessional support for federal climate legislation will be challenging even with a reinforced democratic majority in Congress. • Federal climate legislation may be adopted in 2010 at the earliest. • Obama’s delegation will likely go to Copenhagen without a clear Congressional mandate. Important not to repeat the mistakes of the Clinton administration in Kyoto: U.S. commitments must be negotiated on the basis of status in the domestic decision-making process. • Even with federal legislation in place, the stretch from 60 to 67 votes in the Senate may be a long one. 9